National Republican., 1887-10-10

nance.
The New York Independent, one OF the
leading religious papers Of the country,
noted for its breadth OF thought, has wan
6ered from the domain with which 1t is
familiar, and in its issue OF the 9Th in
slant steps into the field OF finance, and
essays to instruct its readers on that sub
sect.
The Independent is not at home on this
subject, and like all novices blunders along,
giving expression to views that are not
sustained by law, because 1t relies simply
upon one enactment without connecting ID
with previous laws, or giving due consid-
Grafton to the weight and meaning of the
words used in the law it quotes.
The Independent tells Of the conference
held by Secretary Fairchild with some of
'the leading bankers" of New York as to
the policy Of the Treasury Department in
buying bonds at premium, and says these
bankers, "without exception, expressed
themselves strongly in favor of the policy
indicated in the last treasury circulir,n
which is the one directing the purchase Of
bonds at premiums ranging from s i 10 to
% per cent.
The Independent says:
The 1000 900 OF bonds which the Secretary
proposes TO buy will, if ifpurcbased. go to the
account of the sinking fund. There is no rea-
son, however, why he should stop the pu.
chase Of bonds at this point, provided that
the necessities of the money market r, q lire
its continuance. He has ample authority at
any time to use the surplus money in the
treasury for the purchase OF government
bonds. The second section of the act OF
March 8, 1881, expressly says:
"That the Secretary of the Treasury may at
any time apply ths surplus money In tha
treasury, not otherwise appropriated, or so
much thereof as he may consider prose to
the purchase or redemption of United States
bonds: Provided, that the bonds 20 purchased
or redeemed shall constitute no part of the
sinking fund. but shall be Cancelled"
The Secretary of the Treasury, having met
the demands of The law In respect to the sink
ing fund, may, under this authority, go on
with his bond purchases, subject only TO the con-
dRions imposed By The iaW itseV. There cannot
be the least doubt about his authority in the
premises.
II is to be remembered that the treasury has
on hand a large surplus for which 1t has no
use, and that by the collection of revenue It /,
constantly abstraciing money from the chan
neIs OF trade at the rate of nearly 100000 a
day. Unless the whole or the larger portion
OF these funds is speedily returned to the
money market. the effect Is to withdraw
money which the people need for commercial
purposes, and lock 1t up in the treasury In the
idle state, 10 the Inconvenience and damage
of busicess. The only way In which til 3
treasury, in existing circumstances can pre-
vent this result is by the purchase of govern
la ,lart L. IA,
act of March g. 1881. This he can and should
do until Congress shall otherwise direct.
The italics in the above extract are
ours, and they cover the whole ground. The
Secretary can purchase" bonds, 1,rOvided
Ghrays that The price he pays is not ADORE The
par rdluc Of The bOAd. IL more than the par
value is required by the bondholder, then
he must exercise the privilege of "redenlp-
ton" conferred upon him by the law OF
1869, unrepealed on the statute books to-
day.
The laws in relation to the bonds must be
tGken as whole, not one single paragraph
selected and that made the basis OF an act
which increases the public debt. The Iadt-
pendent should take these laws all together
and consider them before 1t again indorses
an act of the administration wholly uuau-
thorized by law.
Here are the laws on this subject com
plete:
On the 25th OF February, 1862, Congress
passed the law entitled Gan act to author
ize the issue Of United States notes, and
for the redemption thereof, and for the
funding the floating debt OF the United
States.n The fifth section of that law reads
as follows:
That all duties on imported goods shall be
paid in coin, or in notes payable on demand
heretofore authorized to be issued, and by law
receivable in payment of public dues, and the
coin sopaid shall bes set apart as a special fund,
and shall be applied as follows:
First, To the payment In coin of the interest
on the bonds Of the United States.
Second, 10 the purchase or payment of one
ytr ceRtm OF the entire debt of the United
States, to be made within each fiscal year after
the lst day of Iuly, 1862 which is to be set
apart as a sinking fund, and the interest OF
which shall in like manner be applied to the
purchase or payment of the public debt as the
secretary of the Treasury shall from time to
time direct United States Statutes at Large.
vol i2, page 3lGl.
On the 18th Of March, 1869, Congress